By Justine Irish D. Tabile, Senior Reporter

Philippine infrastructure spending plunged by 34% in June, as stricter validation, audit, and documentation requirements delayed disbursements, according to the Department of Budget and Management (DBM).

The latest DBM report showed that infrastructure and other capital outlays fell 34.1% to P98 billion in June from P148.8 billion a year earlier. Month on month, however, infrastructure spending rose 22.4% from P80.1 billion in May.

"The infrastructure disbursements of the DPWH (Department of Public Works and Highways) were affected following the implementation of strengthened payment validation, audit, and documentary safeguards designed to ensure that public funds are released only for properly documented, verified, and compliant infrastructure works," the Budget department said.

The slowdown in public works spending was partly offset by capital expenditures under the Revised Armed Forces of the Philippines Modernization Program, the construction of school buildings, and foreign-assisted railway projects, it added.

For the first six months of the year, infrastructure and other capital outlays slumped 40.8% to P367.4 billion from P620.2 billion a year earlier. Despite the annual decline, first-half outlays exceeded the P351.8-billion program by P15.6 billion, or 4.4%.

The DBM attributed the above-program spending to additional DPWH releases for mobilization costs, right-of-way claims, and the settlement of accounts payable under the 2026 General Appropriations Act and 2025 continuing appropriations.

The P367.4-billion tally excludes infrastructure spending coursed through subsidies and equity to government-owned and -controlled corporations, as well as transfers to local government units. Including these components, overall National Government infrastructure disbursements declined 28.1% to P518.1 billion in the first half from P720.3 billion a year earlier — 2.5% below the P531.6-billion program for the period.

Public construction has long been one of the main engines of Philippine gross domestic product growth, which is why economists and policymakers track disbursement data closely: sustained weakness in capital outlays can weigh on overall economic activity, while a rebound can support growth. The tightening of payment safeguards also comes amid long-running government efforts to curb corruption and ghost projects in public works, making the trade-off between fiscal discipline and speedy execution a central issue for the infrastructure agenda.

The DBM said infrastructure spending could recover in the second half, driven by the DPWH's additional operating requirements for projects nationwide. Other possible drivers include releases for the Department of Education's Basic Education Facilities, the Department of Agriculture's farm-to-market roads, and projects under the military modernization program. The settlement of accounts payable for the Department of Transportation's foreign-assisted railway projects could also accelerate spending for the rest of the year, it added.

However, acting Budget Secretary Kim Robert C. De Leon said faster infrastructure spending would not mean loosening government controls. "We are not proposing any relaxation of safeguards. In fact, we want more safeguards," he said in a statement. "What we are looking at is how we can hasten implementation and procurement. The issue is not the safeguards. We need to implement. We have to start implementing."

Analysts said the government would have to significantly accelerate project execution and disbursements in the second half to meet its full-year infrastructure spending program.

"The decline in infrastructure and other capital outlays in June was likely due to implementation bottlenecks, slower project execution, procurement and validation delays, and the lag between fund releases and actual disbursements," Union Bank of the Philippines Chief Economist Ruben Carlo O. Asuncion told BusinessWorld via Viber. "Recent efforts to strengthen project review and compliance processes may have also contributed to slower spending in the short term," he added.

Mr. Asuncion said the full-year target remains attainable but has become more challenging and will depend heavily on how quickly agencies can accelerate project execution in the coming months.

"While infrastructure spending typically accelerates in the second half of the year, particularly in the fourth quarter, the substantial contraction seen in the first six months means the government will need a significant catch-up in project implementation and disbursements to reach the programmed P931.54 billion by yearend," he said.

Philippine Institute for Development Studies President Philip Arnold P. Tuaño said the June decline appeared to be part of broader weakness in capital outlays during the first half.

"The decline in infrastructure spending in June appears to be part of the broader weakness in capital outlays that we have seen during the first half of the year," he told BusinessWorld on Thursday. "DBM itself has previously pointed to the slower implementation and completion of projects, as well as more stringent review and validation of payment claims."

Mr. Tuaño added that the year-on-year comparison should be viewed in the context of both last year's spending pattern and the government's 2026 fiscal program. How quickly the DPWH and other agencies clear validation backlogs in the coming months will determine whether the second-half catch-up the government is counting on materializes.